5 Reasons Manufacturers Outsource Logistics
3 minute read
Should you outsource logistics?
Roughly 71% of goods in the United States are moved by trucks. And while a company’s freight spend is often one of its largest budget items, supply chain rarely has a seat at the table. Logistics departments are often understaffed and suffer from high turnover which means that employees have limited transportation knowledge. This is a problem that can be met head on with outsourced logistics services.
Without Outsourced Logistics Manufacturers Risk:
- Excessive liabilities due to sourcing carriers and negotiating contracts without proper information and knowledge of constantly changing government regulations.
- Financial loss and missed opportunities due to an out-of-control freight budget.
- Ruined reputation due to repeated service failures.
Are you resistant to outsourcing your logistics? Do you believe that you can and should handle all of your business functions in-house? Think again–it’s not uncommon for small business owners to outsource executive level positions such as Chief Financial Officer or Chief Marketing Officer. In the same way, you can outsource logistics to experienced transportation professionals.
5 Reasons to Outsource Logistics
According to Steve Syfan in Inbound Logistics, “a 3PL should be able to reduce transportation costs by at least 5 percent, and as much as 25 percent for manufacturers who have been running their own shipping costs.” In addition, you’ll see savings in both overhead costs and non-productive hours. When you outsource logistics, you’ll see savings in payroll taxes, insurance, and benefits paid to full-time employees. You can double the actual cost of a full-time employee by eliminating lunch breaks, doctor appointments, and other gaps in working hours. This doesn’t mean you have to eliminate positions, but it does mean you can free up valuable employees to do more meaningful work for your organization.
Technology is changing daily. A 3PL like AM Transport Services that specializes in Logistics as a Service has access to some of the newest technologies which include Data Capture and Analysis, GEO Fencing, GPS tracking and visibility, Freight Bill and Auditing, not to mention, a cloud-based Transportation Management System (TMS) that integrates all relevant processes into one finely tuned machine while providing flexibility, robust reporting, security, and an open API.
Your business is not like the business down the street. You need customized solutions that take into account your organization’s needs. When you outsource logistics to a trusted partner, they’ll get to know you and your freight, analyzing, assessing, and applying innovative solutions for your unique shipping needs.
3PLs have a breadth of knowledge because logistics is their sole focus. It’s what they do. An experienced 3PL has the tools and the know-how to navigate things like dropped loads, detention difficulties, and missed appointments. They’re up-to-date on industry standards and regulations which can expose shippers to liability and excess cost.
Communication and collaboration are at the heart of excellent customer service built on best practices and trust. Are you tired of waiting on-hold, being hung up on and never called back? Or worse yet, are your customers tired of waiting on hold, frustrated by lost or late shipments, aggravated by repeated service failures? When you outsource logistics with a 3PL like AM Transport Services, you and your customers experience the best customer service in the business. Our team members answer our own phones. You’ll never get a message service or a phone tree. Just real people who care about your freight 24 hours a day, 7 days a week, 365 days a year.
AM Transport Services is the leading provider of outsourced logistics for midwest manufacturers and distributors. We provide proven technology, exceptional service, and a plan customized to an organization’s unique needs. For 30 years, we have been helping hundreds of companies in a variety of industries save money and streamline their logistics operations. If you’re considering outsourcing some or all of your logistics operations, schedule a call today with one of our logistics professionals.